UK’s JD Sports shrugs off Nike woes with multi-brand approach

BRITISH sportswear retailer JD Sports Fashion is confident it will meet annual profit forecasts after its multi-brand strategy boosted half-year results. This comes even as Nike, which accounts for 45 per cent of its sales, struggles.

The retailer said on Wednesday (Oct 2) that its growth plans were on track despite a “promotional and competitive” marketplace. The company also sells Adidas, On, Hoka and other brands in Britain, Europe and the United States.

Nike on Tuesday posted disappointing quarterly sales growth, and warned its holiday season would likely be filled with discounts.

Worries over Nike hit shares in JD Sports in early deals. They traded down 3 per cent at £1.45, and have lost about 10 per cent of their value in the year to date.

“We expect short term growth concerns over demand volatility and for Nike’s underperformance to continue to weigh on JD’s valuation,” Investec analysts said.

German sportswear brand Adidas – Nike’s biggest competitor – has been gaining traction with its Samba and Gazelle sneakers. Nimbler rivals On and Deckers’ Hoka are also taking market share.

JD chief executive Regis Schultz said those labels were helping it outperform the market.

“Our multi-brand model and the agility that we have around moving across different brands is the recipe of our success,” he added.

Signalling his hopes for a turnaround at Nike, he said he was “very happy” about the appointment of Nike veteran Elliott Hill as the sportswear giant’s new president and chief executive officer.

In the 26 weeks to Aug 3, JD posted adjusted pre-tax profit of £405.6 million (S$694.6 million), beating analysts’ expectations of £384 million.

JD reiterated its full-year guidance for profit of between £955 million and about £1 billion, up from £917.2 million in the corresponding year-ago period. REUTERS